Analyze the tax implications

Reference no: EM13663902

Analyze the tax implications for the following case study. Apply the IRS codes to determine itemized deductions for individuals. Support your conclusions with reference to specific IRS codes and regulations.

During 2011, Emily sustains serious injuries from a snow-skiing accident. She incurs the following expenses:
Item Amount
Doctor bills $11,700
Hospital bills 9,400
Hot and warm sauna 15,000
Legal fees in suit against ski resort 3,000

Emily is single and has no dependents. For the year, her AGI is $58,000. In 2011, she pays $600 in medical and dental insurance premiums, which are withheld from her paycheck on an after-tax basis, $2,750 in mortgage interest on her home, and $1,200 in interest on her car loan. Her health insurance provider reimburses her for $10,000 of the medical expenses. Based on her doctor's recommendation and prescription, Emily had a contractor install a certified hot and warm sauna at a cost of $15,000 in the year. She paid all of it with her savings in 2011. The Fair Market Value of the property improved by $7,500. Emily had real estate taxes of $4,000 on her property. Emily had no other personal exemptions. Based on this case study information, determine Emily's itemized deductions. Which of these items can and cannot be listed as medical deductions? Why? What is her 2011 taxable income?

Reference no: EM13663902

Questions Cloud

Group term life insurance : Group Term Life Insurance

How much higher is the manager bonus : if the net income after taxes is $35,700 for FIFO and $29,400 for LIFO, how much higher is the manager's bonus if FIFO is adopted? The tax rate is 30% and the bonus rate is 20%.

Polk company builds custom fishing lures for sporting goods : Polk Company builds custom fishing lures for sporting goods stores.

Why is documentation important to ais : Why is documentation important to AIS?

Analyze the tax implications : Analyze the tax implications

How should depreciation be recorded : How should depreciation be recorded?

How many photons per second enter the eye : The threshold of dark-adapted (isotopic) vision is 2.0 multiplied by10-11 W/m2 at a central wavelength of450 nm. If light with this intensity and wavelength enters the eye when the pupil is open to its maximum diameter of 8.5 mm, how many photons per..

Constant net torque is applied to a object : A constant net torque is applied to a object. Which one of the following will not be constant? Using a screwdriver, you try to remove a screw from a piece of furniture, but you can't get it to turn. To increase the chances of success, you must use a ..

Planet according to the observers on earth : A spaceship travels at a constant speed from earth to a planet orbiting another star. When the spacecraft arrives, twelve years have elapsed on earth, and 9.2 years have elapsed on board the ship. How far away (in meters) is the planet according to t..

User Account

All Pages